[SMM Analysis] China's Breakthrough Amid India's Green Hydrogen Frenzy: Opportunities, Competition, and Localization Strategies

I. India's Energy Layout

Previously, with strong support from both central and local government policies, the share of non-fossil fuel power generation in India exceeded 50%, achieving the country's self-set 2030 target under the Paris Agreement five years ahead of schedule. India is accelerating its pace on the path to diversifying its energy structure.

II. Cooperation between Chinese Enterprises and India in the Hydrogen Sector

Hydrogen, as an important component of clean energy, has also attracted attention from relevant Indian government departments. An official from the Indian department stated that India aims to capture nearly 10% of the global green hydrogen market, positioning itself as a major producer and a trusted global supplier of green hydrogen. In the field of hydrogen, Indian energy-related companies have engaged in extensive technical and project cooperation and exchanges with Chinese electrolyzer enterprises:

In January 2025, SunHydrogen successfully signed a supply contract with the Indian ACME Group, becoming the company with the largest share in the 320MW green ammonia project in Oman for water electrolysis hydrogen production systems. According to the contract, SunHydrogen will provide multiple sets of 1000Nm³/h ALK hydrogen production equipment and a full life cycle flexible hydrogen production solution for the project, with delivery scheduled to be completed within 2025.

In February 2025, the first batch of 1MW alkaline water electrolysis hydrogen production complete equipment delivered by Guofu Hydrogen to Advait Energy Transitions Limited, headquartered in Ahmedabad, India, was successfully shipped from Zhangjiagang.

A series of strategic layouts by the Indian government not only may reshape the global energy landscape but also place Chinese electrolyzer enterprises at a crossroads of opportunities and challenges.

III. Strategic Opportunities

1. Explosive Demand Growth Creates Equipment Shortages

India plans to achieve an annual green hydrogen production capacity of 5 million mt by 2030, which means it needs at least 15GW of electrolyzer installations. Currently, domestic electrolyzer capacity in India is almost zero, and orders for major global suppliers are already booked until 2025. The 320MW project in Oman signed by SunHydrogen and the ACME Group, and the 1MW equipment delivered by Guofu Hydrogen to Advait, are typical examples of Chinese enterprises filling this gap. Against this backdrop, Chinese enterprises can leverage their scale advantages to become a key part of the global supply chain.

2. Policy Benefits and Opportunities for Joint Industry Ecosystem Development

India's "National Green Hydrogen Mission" offers a subsidy of 17.49 billion rupees, which, although lower than the $3 per kg subsidy provided by the US Inflation Reduction Act (IRA), still creates long-term investment value for Chinese enterprises when combined with its 25-year transmission fee reduction policy. The 300MW electrolyzer manufacturing base jointly built by Guofu Hydrogen and Advait is a typical strategy to seize the opportunity presented by India's "Production-Linked Incentive Scheme" (PLI).

III. Risks and Challenges

1. Risk of Technological Substitution: The current cost of green hydrogen in India is approximately $3.5-4.5 per kg, more than twice the cost of hydrogen produced from fossil fuels. Despite Chinese electrolyzer prices being 30%-50% lower than those in Europe and America, the Indian government still demands further price reductions.

2. Geopolitical Competition: Germany has signed a hydrogen cooperation memorandum with India, planning to import green hydrogen over the long term through the "Hydrogen Blueprint." Meanwhile, US companies, bolstered by the subsidy advantages provided by the Inflation Reduction Act (IRA), are poised to make their move. Additionally, it is noteworthy that India may follow the EU's lead in implementing a "Carbon Border Adjustment Mechanism," requiring imported electrolyzer products to provide proof of their full life cycle carbon footprint, which will significantly increase compliance costs for Chinese enterprises.

Conclusion

The competition in India's hydrogen market is, at its core, a contest for the global narrative on energy transition. Chinese electrolyzer companies must seize the strategic opportunities presented by capacity expansion while remaining vigilant against the multiple challenges posed by technological substitution, cost competition, and geopolitical dynamics. Only through a three-pronged approach of technological innovation, ecosystem co-construction, and deep localization can they write a new chapter in the story of China's hydrogen industry in this critical game that will shape the future energy landscape.